Without Transparency, Michigan Catastrophic Claims Association is Taxation Without Representation

LANSING – Coalition Protecting Auto No-Fault (CPAN) President John Cornack used today’s tax filing deadline to take the Michigan Catastrophic Claims Association (MCCA) to task for practicing “taxation without representation.”

The MCCA is a private non-profit organization created by Michigan Legislature in 1978. It serves as a reinsurance fund that reimburses auto insurance companies for personal injury claims exceeding $545,000. Each Michigan driver currently is required to pay $160 annually per vehicle to fund the MCCA. In June, that fee rises to $170.

“Our founding fathers were adamant that there should be no taxation without representation, yet that is exactly what we have happening with the MCCA,” said Cornack. “Here we have an organization created by the Legislature that holds more than $18 BILLION of the public’s money, operating with no real public oversight. It’s a travesty.”

MCCA’s board includes AAA Insurance, Auto-Owners, Citizens Insurance, Farmers Insurance and State Farm. The Michigan director of the Department of Insurance and Financial Services serves as a non-voting ex-officio member. MCCA board meetings are not subject to the Open Meetings Act, and the organization refuses to comply with state Freedom of Information Act laws.

CPAN has filed a FOIA lawsuit seeking to open the MCCA’s rate-making data. The Michigan Court of Appeals ruled last year that the MCCA is a public body as defined by Michigan law, but disagreed with CPAN’s assertion that the organization’s FOIA exemption is unconstitutional. The case is currently in the State Supreme Court.

In addition, legislation has been introduced in both the State House and Senate that would bring transparency to the MCCA. Senate Bills 240 and 241 would require MCCA to abide by Michigan’s Open Meetings and FOIA laws. House Bill 4354 would do the same but also require a member of the public to also sit on the MCCA board and give the State Insurance Commissioner the authority to disapprove of MCCA rate charges that are deemed excessive.

 

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CPAN Calls on State of Michigan to Investigate Auto Insurance Redlining in Detroit

ProPublica Story Shows Why Michigan Needs to Investigate Whether Auto Insurance Companies are Engaged in Redlining

LANSING – The independent nonprofit journalism organization ProPublica recently published a report examining auto insurance premiums and payouts in California, Illinois, Texas and Missouri. The report finds that insurers charged as much as 30 percent more for premiums in zip codes where most residents were minorities, compared to white neighborhoods with similar accident risks or costs.

ProPublica notes that many auto insurers included in the study operate nationally, which means that “minority neighborhoods across the country may be paying too much for auto insurance, or white neighborhoods, too little.”

In response to the story, the Coalition Protecting Auto No-Fault is calling on the Michigan Department of Insurance and Financial Services to conduct a similar study in Michigan’s urban communities.

“Detroit drivers pay some of the highest auto insurance premiums in the country and insurance companies cannot justify it any longer. It doesn’t make sense that drivers are getting charged significantly more for premiums simply because they live on one side of 8 Mile verses the other, but that’s exactly what’s happening,” said CPAN President John Cornack.

“The person living on the Ferndale side of 8 Mile still is driving the same roads and would be going to the same hospitals, yet the Detroit resident gets charged far more. That sounds an awful lot like redlining to me and we are calling on the state to look into it.”

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Group Launched to Fight for Fair Auto Insurance Rates in Detroit

Several community leaders in Detroit joined together today to raise their voices against Detroit’s high auto insurance rates. Spearheaded by former State Rep. Brian Banks, the Detroit Alliance for Fair Auto Insurance launch included Detroit City Council President Brenda Jones, Spirit of Love Church Pastor DaRell Reed and auto accident survivor Saundra Gay.

The new organization will seek to educate Detroit residents about Michigan’s auto insurance system and empower them to be advocates for fair auto insurance reforms at the state capitol. Key issues raised at the news conference, which can be viewed on the group’s Facebook page, include the insurance company practice of using non-driving related factors like credit scores to set higher rates, and redlining in Detroit.

Ms. Gay, who was injured in a rollover accident in 2000, is quoted on the group’s news release as saying “I’m alive today and able to be a productive member of society because of the care and upport provided by Michigan’s no-fault auto insurance coverage. It’s critical that lawmakers in Lansing do everything they can to reduce rates while ensuring accident victims get the care they need.”

The Detroit Alliance for Fair Auto Insurance said it plans to hold a series of town hall discussions throughout Detroit in May where they will educate residents about their auto insurance policies and discuss ideas for lowering auto insurance rates.

CPAN is pleased to see that the organization was adamant that any changes to Michigan’s no-fault system must protect accident survivors while also lowering rates.

More information about the Detroit Alliance for Fair Auto Insurance can be found at www.DetroitFairInsurance.org.

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CPAN Praises No-Fault Transparency Legislation

LANSING – Sen. Steve Bieda (D-Warren) introduced legislation today that would bring much needed transparency to Michigan no-fault auto insurance system. The legislation, Senate Bills 240 and 241, requires the Michigan Catastrophic Claims Association (MCCA) to abide by Michigan’s Open Meetings and Freedom of Information (FOIA) acts.

In addition to Sen. Bieda’s bills, Reps. Henry Yanez (D-Sterling Heights) and Abdullah Hammoud (D-Dearborn) introduced House Bill 4354 in the State House. In addition to subjecting the MCCA to the Open Meetings Act and FOIA, his bill would require the State Insurance Commissioner to appoint a member of the public to sit on the MCCA board and empower the commissioner to disapprove of any total MCCA charge the commissioner deems excessive.

The MCCA is a fund created by the state legislature that reimburses Michigan auto insurers for personal injury claims above $555,000. The $18.8 billion fund is governed by a board of insurance industry executives who refuse to comply with state transparency laws.

In support of the legislation, CPAN spokesperson Josh Hovey issued the following statement:

“Today, more than ever, transparency is essential for a functioning democracy. We hope lawmakers from both parties will join together to support transparency and accountability for their constituents and all Michigan drivers.

“The MCCA is a critical piece of Michigan’s auto insurance system because it enables auto insurance companies to provide lifetime coverage for our state’s most seriously injured accident victims. But as a state-created organization that charges $170 on every insured vehicle in Michigan, the public expects transparency. If the insurance company executives are confident that’s a reasonable charge, they should have no problem opening up the MCCA books to public scrutiny.

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.

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 The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.  


Michigan Drivers Handed Secretive $10 Auto Insurance Rate Increase

LANSING – The Coalition Protecting Auto No-Fault (CPAN) learned today that Michigan drivers will pay an additional $10 on their auto insurance premiums this year. The cost increase is the result of the insurance industry-controlled Michigan Catastrophic Claims Association (MCCA) increasing the fee charged to every Michigan auto insurance policy from $160 to $170 per vehicle.

The MCCA is a reinsurance fund created by the state legislature that helps reimburse insurers for costs of caring for catastrophic auto accident victims for any claim above $555,000. The organization, which reports holding $18.8 billion in assets, is governed by a board of insurance industry executives and is not subject to state Open Meetings or Freedom of Information laws.

In response to today’s announcement, CPAN spokesperson Josh Hovey issued the following statement:

“The MCCA is an important tool that helps ensure Michigan’s most seriously injured auto accident survivors receive the care they need. But the public has a right to know how it sets its rates. This is an organization created by our state government that is allowed to be controlled entirely by insurance companies without any transparency whatsoever. It’s unacceptable.”

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.

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The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.


CPAN to Mayor Duggan: Comprehensive Auto Insurance Reform Must Protect Accident Survivors

Detroit Mayor Mike Duggan announced this evening during his State of the City Address that he would urge Lansing lawmakers to support major reforms to Michigan’s auto insurance system. In response to Mayor Duggan’s comments, the Coalition Protecting Auto No-Fault (CPAN) President John Cornack issued the following statement:

“We all agree that Detroiters are paying far too much for auto insurance. However, to blame Michigan’s no-fault system is completely misleading. The medical benefits provided by Michigan’s no-fault law make up roughly one-third of the cost of a policy, so to say no-fault is the main problem behind the cost of auto insurance is simply untrue.

“The mayor’s suggestion that Michigan use Ohio, which does not have no-fault, as an example of an auto insurance system is also extremely misguided. First, dropping no-fault in favor of Ohio’s model would not significantly reduce rates. What it would do is cause major delays in care for catastrophic accident victims and result in a massive cost-shift onto the backs of Michigan taxpayers – just like it did in Colorado when their Medicaid expenses tripled after changing from a no-fault to a tort system. Michigan can’t afford the expenses and accident victims can’t afford to wait for care.

“We hope Mayor Duggan will join us in standing up for accident victims in Detroit and across the state by working toward comprehensive solutions that will reduce auto insurance costs in Michigan and at the same time provide accident victims with access to the quality care and rehabilitation benefits they need for their recovery.”

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CPAN is a broad coalition of health care providers, patient advocates and accident survivors who are committed to preserving Michigan’s model auto no-fault insurance system. For more information, please visit www.ProtectNoFault.org.


CPAN Administrative Director Receives Catalina Andres Humanitarian Award

Martha Levandowski is third person from CPAN to win the award in past five years

LANSING – The Coalition Protecting Auto No-Fault (CPAN) is proud to announce that on Wednesday, Dec. 9, Administrative Director Martha Levandowski was awarded the Catalina Andres Humanitarian Award for her ongoing and tireless efforts to advocate on behalf of auto accident survivors. The award was presented to Levandowski by the ACS Foundation during the acclaimed Holiday Schmooze black tie gala held at The Reserve in Birmingham.

“We are thrilled to have yet another member of our team become a recipient of this prestigious award,” said CPAN President John Cornack. “Martha’s tireless efforts to advocate on behalf of injured people and her determination to protect Michigan’s Auto No-Fault Law are the true embodiment of a selfless humanitarian.”

Named in honor of Catalina Andres, a woman who selflessly dedicated her life to helping and serving others while fulfilling her dream by building a medical clinic and founding the Twin Hearts Medical Surgical Mission in the Philippines.

Since joining CPAN in 2011, Levandowski has been responsible for quadrupling CPAN’s membership- from just over 200 members to almost 1000 members today. She has helped to facilitate the organization’s grass roots advocacy and community outreach through the coordination of town hall meetings across the state including a statewide event in Lansing, while organizing 15 advocacy workshops in the past three years. Levandowski also spearheaded the organization’s first-ever annual Gala in 2013, all while working closely with the organization’s executive committee and board of directors to ensure and promote and uphold auto accident survivors’ rights to quality medical care and rehabilitation under the Michigan Auto No-Fault System.

Levandowski is the third person from CPAN to receive this award in the past five years. CPAN President John Cornack received the award in 2011. George T. Sinas, partner at Sinas Dramis Law Firm and CPAN’s legal counsel, received the award in 2013.

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Newly Proposed No-Fault Reforms Worthy of Strong Consideration

LANSING – State Representative and House Insurance Committee Minority Chairman Brian Banks (D-Detroit) today announced the introduction of two bills that would lower rates for Michigan drivers while maintaining the life-saving personal injury benefits provided by the current no-fault system.

“Michigan has been in need of comprehensive no-fault reform that reduces medical costs to insurers, addresses fraud in a balanced way and offers real savings to drivers,” said Coalition Protecting Auto No-Fault President John Cornack. “CPAN has not had the opportunity to review Rep. Banks’ proposals in full detail, but his legislation hits on all of those notes – and it maintains quality injury protection for catastrophic accident victims. We will be urging lawmakers to look at these bills as a real opportunity for compromise.”

The newly introduced legislation, which is modeled after a Texas program, offers a strong alternative to D-Insurance — Detroit Mayor Mike Duggan’s proposal for a low-cost / low-benefit auto insurance for Detroit residents. Instead, Rep. Banks’ legislation proposes a 12 percent rate reduction of the average annual premium for consumers. Drivers are eligible if they meet one of the following requirements:

  • Reside in an area with a population of 500,000 or more
  • Live in rural or urban municipalities bordering the areas that meet the population criteria
  • Live in an city, township or village where 35 percent of drivers are uninsured;
  • Or live in a designated zip code or a community bordering a designated zip code.

Insurance companies that participate in the reduced rate auto insurance plans would receive a $500 tax credit for every previously uninsured household that signs up under the program. The legislation also allows Michigan auto insurers to require a co-pay for Personal Injury Protection (PIP) benefits, similar to those required under standard medical insurance.

The legislation also creates a fraud authority that would investigate both consumer fraud and the accusations of unfair claims practices by auto insurers. In addition, Rep. Banks’ legislation limits hospital reimbursement rates by auto insurers to no more than 80 percent of their standard charges. This limitation would apply only to licensed hospital facilities and not to independent medical practitioners or post-acute rehabilitation facilities.

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Newly Proposed No-Fault Reforms Worthy of Strong Consideration

LANSING – State Representative and House Insurance Committee Minority Chairman Brian Banks (D-Detroit) today announced the introduction of two bills that would lower rates for Michigan drivers while maintaining the life-saving personal injury benefits provided by the current no-fault system.

“Michigan has been in need of comprehensive no-fault reform that reduces medical costs to insurers, addresses fraud in a balanced way and offers real savings to drivers,” said Coalition Protecting Auto No-Fault President John Cornack. “CPAN has not had the opportunity to review Rep. Banks’ proposals in full detail, but his legislation hits on all of those notes – and it maintains quality injury protection for catastrophic accident victims. We will be urging lawmakers to look at these bills as a real opportunity for compromise.”

The newly introduced legislation, which is modeled after a Texas program, offers a strong alternative to D-Insurance — Detroit Mayor Mike Duggan’s proposal for a low-cost / low-benefit auto insurance for Detroit residents. Instead, Rep. Banks’ legislation proposes a 12 percent rate reduction of the average annual premium for consumers. Drivers are eligible if they meet one of the following requirements:
Reside in an area with a population of 500,000 or more
Live in rural or urban municipalities bordering the areas that meet the population criteria
Live in an city, township or village where 35 percent of drivers are uninsured;
Or live in a designated zip code or a community bordering a designated zip code.

Insurance companies that participate in the reduced rate auto insurance plans would receive a $500 tax credit for every previously uninsured household that signs up under the program. The legislation also allows Michigan auto insurers to require a co-pay for Personal Injury Protection (PIP) benefits, similar to those required under standard medical insurance.

The legislation also creates a fraud authority that would investigate both consumer fraud and the accusations of unfair claims practices by auto insurers. In addition, Rep. Banks’ legislation limits hospital reimbursement rates by auto insurers to no more than 80 percent of their standard charges. This limitation would apply only to licensed hospital facilities and not to independent medical practitioners or post-acute rehabilitation facilities.

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EPIC-MRA Press Release: Statewide Poll on Detroit Auto Insurance Plan

Dinsurance.EPIC-MRA Infograph_handoutEPIC-MRA conducted a statewide survey of voters about their opinions on the proposal (Senate Bill 288) to allow a low-cost / low-benefit auto insurance policy in Detroit. The bill would limit the medical care available to Detroit drivers injured in auto accidents to a total of $250,000 in critical medical care, and $25,000 in non-critical care.  (per accident, not per individual).

Supporters say the proposal would reduce the cost of caring for auto accidents in Detroit which could reduce insurance rates. However, CPAN has issued several concerns. Based on the survey results, Michigan voters clearly feel this proposal is a bad idea as well.